NEC Pulls Out Of Smartphone Market, Will Continue Feature Phone and Tablet Development

NEC has announced that it is pulling out of the smartphone business today, citing a downward slide in smartphone sales in an increasingly competitive smartphone market. NEC will still continue to produce tablets, and is focusing on its “Social Solutions Business,” which focuses on information and communications technologies. The company will still support recently released devices, as well as continue to produce feature phones.

The Japanese manufacturer was once one of the biggest in Japan, failed to gain popularity in the U.S., with a handful of smartphones being released there. Back in 2010, NEC merged with Casio and Hitachi, with most NEC devices taking on the Casio name. The most recent Android devices to be released were the rugged Casio G’zOne Commando, and the NEC Terrain, which were available on AT&T and Verizon.

Press release follows below.

NEC reviews mobile handset business

Tokyo, July 31, 2013 – NEC Corporation (NEC; TSE: 6701) is reviewing the mobile phone handset business operated by NEC CASIO Mobile Communications, Ltd. in order to accelerate its growth strategy focused on the “Social Solutions Business,” which provides advanced social infrastructure capitalizing on information and communications technologies (ICT) .

Specifically, as of today, NEC is ending the development, manufacturing and sale of smartphones, other than models already on the market. NEC will continue providing maintenance and support services for its existing smartphones. NEC will also continue developing and producing conventional mobile phone handsets. Furthermore, NEC will utilize NEC Saitama, Ltd. for its Social Solutions Business, as well as the production of conventional mobile phone handsets for the Japanese market. Moreover, NEC will continue operating its tablet business.

As the market for mobile phone handsets, including the rapid spread of smartphones, has dramatically changed, economies of scale have become increasingly important for the maintenance and strengthening of competitiveness. However, NEC’s mobile phone handset shipments are following a downward trend and it is difficult to foresee improved performance in the future. In light of these circumstances, NEC reached this decision to review its mobile phone handset business following a comprehensive examination of the business’ direction.

NEC will now strengthen its portfolio management even further, in addition to focusing management resources on the company’s Social Solutions Business. Going forward, NEC will capitalize on the technologies and know-how acquired through the development of wireless communications, terminals and human interfaces for the mobile phone handset business in order to strengthen its Social Solutions Business. As a result, NEC will reposition NEC CASIO Mobile Communications employees, except those who continue to engage in business operations, within the NEC Group, centering on the Social Solutions Business.

NEC is in the process of assessing the impact of this resolution on its consolidated financial results for the fiscal year ending March 31, 2014. NEC will report any significant developments on this matter as soon as information becomes available.